This article originally appeared on the BeyeNETWORK.
1 + 1 = 3
As many people had long predicted, 2005 was the year of mergers and acquisitions. These mergers and acquisitions cover the entire spectrum of the telecommunications industry. Here are some of the highlights in particular segments:
- Large United States Telecom Service Providers: The SBC and AT&T merger, announced in January, puts one of the “Baby Bells” back together with “Ma Bell.” With the recent announcement that the joint company will continue to fly the AT&T banner, how does Cingular (owned by SBC and BellSouth) feel about eliminating the AT&T Wireless brand in its 2004 acquisition?
- International Telecom Service Providers: The new Telefonica and O2 merger breaks some of the European telecom industry’s taboos. Is this just the beginning of Telefonica’s acquisition strategy?
- Backbone Network Providers: In the Level3 and WilTel merger, one medium-sized, acquisition target buys another. Is this a way for Level3 to move into MCI’s spot now that MCI is becoming part of Verizon?
- Alternative (VoIP) Telecom Service Providers: An example is the eBay and Skype merger. Will Skype follow a similar path as PayPal, or will eBay treat this acquisition differently?
One of the downsides to all this merger activity is that some see pricing pressures returning to the industry. Fewer business competitors can mean higher prices for those seeking the services. This is Porter’s Power of the Supplier.
So what does this mean for the business intelligence operations for these and other firms? I see two main hurdles facing business intelligence groups:
First, acquisitions mean integrating two separate organizations—data and all. There will be plenty of integration work to do with these new organizations, if not complete from the last re-organization. Where will the leadership and direction come from?
Next, the CXOs have promised cost savings and efficiencies with these business deals, either internally or to Wall Street. Which business intelligence organization, or combination of the two, will be on the final organization chart? Which business intelligence technologies will be there?
VoIP is not a new invention from the last six months…. But when the Economist puts the “death” of the traditional telecom service provider on the cover in association with eBay’s purchase of Skype, it appears that VoIP has hit the mainstream.
VoIP is moving out of the corporate PBX and PC attached headset. In fact, you can now have a home VoIP conversation on a “phone.” The conversation quality is constantly improving as well. This is providing a meaningful substitute to traditional wireline and wireless telecom service providers. As stated in Porter’s Power of the Substitute, some combinations of VoIP and various transmission networks are amazing.
What does VoIP mean for business intelligence?
Billing World and other similar organizations believe that the key to VoIP is the ability to provide accurate and sustainable billing and operational support systems (B/OSS). Such organizations are the B/OSS community! Hopefully, they are taking this approach. Carolyn Schuk’s article on VoIP fraud shows exactly how much residential and corporate VoIP providers have to lose if they do not provide that robust B/OSS infrastructure.
From customer care to provisioning to billing, maintaining the “standards” set by the existing telecom industry is a good way for VoIP providers to win customers from the remaining group of traditional providers. But I do not believe that B/OSS, the traditional customer care center, will be the answer. The answer is in the transition from the customer care call center to the self supported activation, provisioning and care for a VoIP customer. For the VoIP provider’s business intelligence organization, this will require new ways of including the customer in the loop for accurate billing, fraud detection and network outages. While the big challenge is to avoid the classic Dilbert moment where you must report network performance problems, but you cannot because the network is having the performance problems….
Mobile Virtual Network Operators (MVNO) has been around for years and is found in niche markets worldwide. However, new growth is occurring in the MVNO market. Any market with corporate heavyweights ESPN and Disney entering the market, along with rumors of Wal-Mart and Apple set to join in, rates additional attention.
With the development of 3rd generation (3G) infrastructures and applications, value added services and content will begin dominating the market for MVNOs. ESPN, with so much branded content and a buying audience that most organizations could only dream of serving, will probably make the biggest splash. Personally, I see Apple and the iPod being able to drive the most network bandwidth, and thus revenue. Will we see the return of rotary dialing with the scroll wheel interface?
What will MVNOs mean for business intelligence?
Much like VoIP, business intelligence organizations will have to create new ways to include the customer in their activities. Unlike the merged organizations mentioned above, business intelligence for MVNOs will have to work with other business intelligence organizations. They must work with other business intelligence organizations rather than replace or be replaced by them. With branded content from both inside and outside the organization, proper billing of services internally and externally will be extremely important to the MVNO business plan.
Business intelligence organizations within telecom service providers will have a chance to provide a great deal of value to the industry’s changing business plans. Although there are potential pitfalls with restructuring, the rewards for business intelligence more than make up for those risks.